I’ll wait to find the perfect IRVINE home before I get pre-approved!

by Robert Mack on January 8, 2010

in Irvine Real Estate

I hear this so much from so many prospective buyers in Irvine, Orange County and the surrounding areas, and in my opinion this is probably THE WORST possible strategy when you are preparing to take that next step and buy a home for so many reasons.                                   

Even when you go to buy a car (which is a fraction of the price), the dealer runs your credit 99% of the time before they even consider sitting down with you to discuss options, so my question really is, “how can a buyer expect their realtor to help them find the perfect home if they truly don’t even know what they can afford?”  Buying a home is so much more that just buying a car, so buyers need to treat the pre-approval process a bit more seriously and really do what it takes to ensure not only a smooth transaction, but one they know they will qualify for.

Bottom line is that no seller will even consider an offer from a buyer without a pre-approval, so the reality is that eventually it will have to be completed.  Why delay the inevitable and risk missing out on so many opportunities??

If you are considering buying a home, take a look at 7 reasons why waiting to get pre-approved is a mistake!

  1. It’s free and there is no obligation – I mean what more do you really want as a buyer? A professional loan consultant will sit down with you; run your credit, tell you exactly what purchase price you qualify for, give you a detailed breakdown of your monthly payment, give you a break down of your closing costs, and give you tips/hints on how to possibly get a better deal or rate…..all for FREE!
  2. It takes the guess work and doubt out of the equationRather than just hoping you qualify for a certain amount or guess a purchase price because you “just figure”, why not create a situation for yourself where you actually “know” what you qualify for.  Most of the time home buyers will either qualify for more or less than what they think.  Wouldn’t you want to know this amount before you spend months looking for homes in the WRONG price range?
  3. It gives you a detailed breakdown of your total monthly payment – Also such an important factor in determining how high or low of a purchase price makes sense for your specific circumstance.  It is not uncommon for many buyers to get pre-approved and qualify for a purchase price however decide to go lower to make sure that the monthly payment is comfortable for them.  Just because you can afford a certain amount doesn’t mean you actually want to make a commitment to spend that much per month.  The typical buyer takes a loan amount and uses an amortization table to determine their monthly payments, usually leaving out additional expenses such as HOA, insurance, property taxes, etc.  The lender will include these fees to give you the most accurate monthly payment.
  4. It empowers you to submit a strong offer on the perfect home the minute you see it – Having a pre-approval on hand gives you the power to be ready to submit an offer immediately.  If you are a buyer that is looking for a home, you know that the best homes sell within days of being on the market.  By the time you find the right home and go back to get pre-approved, you run the risk of missing out on the opportunity and losing your chance to a better prepared buyer, and understand that the competition is stiff right now.
  5. Peace of mind – getting pre-approved gives a buyer the confidence of knowing that they are ready when the right time comes.  They know what they can afford, they understand their monthly payments, and they are ready to submit an offer when they find the right home.
  6. You give your realtor the ammunition to go to work for you – A realtor can’t help you to the best of their ability if they don’t know exactly what you can afford and what type of loan you are applying for.  The type of loan makes a difference on the different types of homes you will qualify for, so do yourself and your realtor a favor and give him/her the information they need to really go to work for you.
  7. You have time to shop rates – most lenders are quite competative in their interest rates and closing costs to a buyer, however the fees can be negotiated and different lenders can offer different programs.  Getting pre-approved early gives you time to speak to multiple lenders and choose one that fits your needs and understands your goals.

Although a buyer can find a home without being pre-approved, the process will be an uphill battle.  By taking 2-3 days to get fully pre-approved will make the home buying process the way it should be….FUN & EXCITING! 

For information on getting pre-approved, or to get more information on some great lenders to work with and begin the process, please contact the Mack Team directly and take control of your home search from the start!

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Robert has written 727 articles.

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